• Investors and long-term holders expected better returns from Bitcoin, based on historical trends
• Large wave of selling earlier this month showed disbelief in the bullish scenario

Bitcoin [BTC] faced rejection at $66.5k after a strong rally toward the end of September. October is a month that generally sees positive returns for the coin, but not this time, at least so far. In fact, at the time of writing, BTC was down 4% from the month’s open.

The spent output age bands metric showed that many longer-term holders such as 12 month-18 month band opted to sell Bitcoin on 8 October.

The short-term holders also participated, leading to a wave of selling not seen since January 2021.

Bitcoin halving returns do not match expectations

In a post on X, CryptoQuant Founder and CEO Ki Young Ju noted that we are on course to have the longest sideways price action in a halving year. The 2020 cycle saw Bitcoin begin its rally mid-way through October.

The performance of BTC in the first quarter far surpassed the one seen in 2020, but the two years had wildly different starts. In 2024, the spot exchange-traded funds (ETFs) were approved in the U.S., leading to a massive wave of demand.

In 2020, the onset of the Coronavirus pandemic was looming and every analyst and investor was on the verge of panic due to the threat of economic damage.

A counterargument is that the longer the consolidation phase, the stronger the breakout. Could this happen to Bitcoin, or is the king coin more mature and less amenable to the crazy gains it saw in previous cycles? Only time will tell.

Buy the dip scenario

Crypto analyst nestay pointed out on X that the first two weeks of October have historically seen volatility and a seeming downturn, before recovery.

The 2021, 2023, and 2024 price actions were compared. In each of these case, the market structure turned bearish before a bullish trend was established in the second half of the month.

Read Bitcoin’s [BTC] Price Prediction 2024-25

This might encourage the idea of buying the dip. Now, whether Bitcoin can trend as strongly as it did in the previous cycle is unknown, but long-term holders would likely prefer to HODL than to sell in the face of disappointing Bitcoin performances.